Unsurprisingly, changes caused to employment law and the employment relationship as a result of Coronavirus have dominated the news this month. However, there are also other changes due to take place in April. We have summarised below some of the key issues that employers need to be aware of and prepared for.
Changes to section 1 statements – good work plan
Employers will need to ensure that their contracts of employment are reviewed and amended for all employees starting work on or after 6 April 2020. From that date, a written statement of terms must be given on or before the first day of employment (rather than within two months of employment starting). The amount of information that must be included in the statement will also increase. All workers (rather than just employees) will have the right to a written statement of terms. The following additional information must be included in the written statement:
- The days of the week the worker is required to work, whether the working hours may be variable and how any variation will be determined,
- Any paid leave to which the worker is entitled,
- Details of all remuneration and benefits,
- Any probationary period,
- Any training entitlement provided by the employer, including whether any training is mandatory and/or must be paid for by the worker.
Calculation of holiday pay – reference period increasing
Currently, where an employee has variable pay or hours, their holiday is generally calculated using an average of their pay over the previous 12 weeks. From 6 April, the reference period used in holiday pay calculations will increase to 52 weeks. This aims to ensure that workers who do not have a regular working pattern throughout the year are not disadvantaged by having to take their holiday at a quiet time of the year when their holiday pay might be lower.
Increased statutory payments
Rates of Statutory sick pay and other statutory benefit payments, including statutory maternity and paternity pay, will increase from 5 April 2020.
The National Minimum Wage and National Living Wage (NLW) will increase from 1 April 2020.
Increase in the cap on a week’s pay
For dismissals on or after 6 April 2020, the maximum compensatory award for unfair dismissal will increase from £86,444 to £88,519 and the maximum amount of a week’s pay will increase from £525 to £538.
The amount of a week’s pay is important for calculating payments including statutory redundancy payments and the basic award for unfair dismissal.
Tax on termination payments
Changes are due to come into force dealing with the taxation of termination payments that are over £30,000. Currently, termination payments up to £30,000 can in certain circumstances be made tax free but the balance over £30,000 is subject to deduction of income tax. From 6 April, this is due to change so that the balance over £30,000 will also be subject to employer National Insurance Contributions, making termination payments more expensive for employers.
Parental bereavement leave and pay
Employees will have the right to take one or two weeks off work following the death of a child under 18 or a stillbirth that occurs on or after 6 April 2020. There is no minimum length of service for employees to qualify for this right. Leave may be used any time within the first 56 weeks after the death or stillbirth.
Employees will be required to give notice to the employer of their intention to take leave. During the first eight weeks, notice must be given before the employee is due to start work on the first day of leave. After the 8-week period, one week’s notice will be required. Employees will be protected from dismissal or detriment for exercising their right to leave.
Eligible employees will receive statutory parental bereavement pay. Employees must have at least 6 months’ continuous service and normal weekly earning of at least the Lower Earnings Limit. Pay will be at the same rate as statutory paternity pay but will not be payable during a week in which the employee does any work for the employer.
In addition, it is worth noting that off payroll working rules, which were planned to be introduced into the private sector on 6th April, have been delayed for a year. Gender pay gap reporting deadlines have been suspended for a year.
If you require help reviewing your template employment contracts to ensure compliance in respect of new starters, assistance with updating your employee handbooks or need to know any more detail about any of these changes, please do not hesitate to contact Clover HR on 0121 516 0299 or email us at info@cloverhr.co.uk
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